Don’t get taken for a ride when buying a car

Friday

Jan 24, 2014 at 7:02 PMJan 24, 2014 at 7:02 PM

By Melissa EricksonMore Content Now

At the Detroit auto show in January, the Corvette Stingray was named the car of the year. In determining whether that was a good choice, readers should consider: Does the Stingray appeal to baby boomers?Since boomers are fueling the auto industry, it’s a good question to ask. The buying power of the baby boomer generation can not be denied. At 76 million strong, boomers have more discretionary spending than any other age group, according to Baby Boomer Magazine. Boomers outspend other generations by $400 billion a year on goods and services, according to the U.S. Consumer Expenditure Survey.While boomer money often goes toward recreational and lifestyle pursuits such as travel, dining out and exercise, boomers love their cars and prefer to buy them new.

Buying powerAccording to a recent study by the University of Michigan’s Transportation Research Institute, “The 55- to 64-year-old age group, the oldest of the boomers, has become the cohort most likely to buy a new car.” In 2012 the average car buyer was 56 years old, and the 50-plus age group spent a combined $87 billion on new cars, according to the Consumer Expenditure Survey.“Baby boomers are still an important demographic for the automotive industry,” said Isabelle Helms, vice president of research, analytics and market intelligence for the AutoTrader Group. “Baby boomers are more likely than younger buyers to be purchasing a new car. As part of our recent millennial Study, which looked at generational differences in the car shopping and buying process, we found that 57 percent of the baby boomers we surveyed were new vehicle buyers, compared to 36 percent of millennials and 48 percent of Gen Xers,” Helms said.Baby boomers are more “emotionally attached to their cars because of the way they drive,” Helms said. “Compared to younger generations, more Baby Boomers also view their cars as an important tool to fuel their social lives. While our research shows it’s less important for boomers than younger generations that their car reflect their personality and accomplishments, because baby boomers grew up in a time when a car was the passport to adulthood and freedom, some of the love could be nostalgia-driven,” Helms said.

U.S.-made importantNot surprisingly, boomers identify much more with the Detroit Three manufacturers (Ford, GM and Chrysler) than their younger counterparts and want to buy American-made, Helms said. AutoTrader’s study found that 60 percent of boomers thought it was highly important that they purchase vehicles made by U.S. workers and almost as important that their vehicles be made by U.S. companies. “This type of made-in-America attitude is not as prevalent in younger generations, especially millennials. This is echoed when you look at which cars they’re most interested in on the AutoTrader site – all are domestic,” Helms said.So what kind of cars are boomers buying? At AutoTrader.com, “boomers have a higher propensity to view sports cars than younger generations, particularly Corvette and Mustang,” Helms said. Some top choices include the Ford F-150, Ford Mustang, Dodge Ram 1500, Chevrolet Corvette and Chevrolet Silverado, which was named the truck of the year at the 2014 North American International Auto Show in Detroit.

Car-buying tipsDriving off the lot with a new car is exciting, but the process of buying a car can be challenging. Some of AutoTrader.com’s car-buying tips:• Research at home. You’ll save time and gas money searching the internet for automotive information such as reviews, safety reports, invoice pricing information, gas mileage estimates and engine options. Now is the time to think about the type, body style and options you’ll need for your dream car.• Set a budget. Now that you know the type of car you want to test drive, think about how much you can spend as well as the other expenses that come with car ownership, such as insurance, as well as trade-in value if you have a car to sell.• Test drive the smart way. Be prepared with questions that the test drive should answer: Does the car have enough leg room and the acceleration you need? How does it ride, and is the instrumentation clear and readable?• Head to the dealership. To get a feel for the dealership, it’s a good idea to make an initial phone call to feel out the level of customer service. When ready to buy, come with the necessary paperwork including credit report, price quotes and invoice price for your chosen car, loan pre-approval information, insurance and extended warranty quotes, and trade-in pricing information.• Time to deal. Since you’ve done your homework, be comfortable during negotiations. Don’t be afraid to make a low offer and move up in small increments. Stick to your ceiling price. The Manufacturer’s Suggested Retail Price, by law, must be displayed in the car’s window, but that doesn’t affect your baseline offer. The dealer should be able to explain each and every fee. Remember, putting more money down up front saves more money in the long run than getting a lower rate.